HOUSE prices in Scotland continued to rise in March 2023, albeit at the slowest rate since June 2020, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey. And contrasting the current situation with the corresponding month last year illustrates the extent of the change in market conditions during the last 12 months.
A net balance of 5% of respondents reported that prices rose through March. Although this figure has remained in positive territory, this is the lowest it has been in nearly three years. Scotland is one of only three UK regions which saw prices continuing to rise through the month of March, but outside of coronavirus restrictions, it is the lowest net balance for prices since July 2016. The price balance is also down dramatically on March 2022, when the net balance was +71%. Since then, it has seen a steady decline.
Looking at demand and supply, a net balance of -6% of respondents reported a fall in new buyer enquiries in the latest survey and a net balance of -11% of surveyors reported a fall in new instructions to sell.
With both demand and supply lower, sales were also reported to be falling back, with a net balance of -22% of respondents reporting a fall in sales through the month of March, down from -12% the month previous.
The limited supply and lower demand may be weighing on surveyor’s outlook in Scotland, with a net balance of -25% expecting sales to fall over the course of the next quarter.
Looking at price expectations, a net balance of -24% of Scottish respondents was recorded regarding the three-month outlook. This compared to the national average of -49%. Indeed, respondents in Scotland are the less pessimistic than the UK average about the pricing and sales outlook on both a three-month and 12-month horizon. A net balance of +25% of Scottish respondents expects prices to be higher in a year’s time and a net balance of +9% expects sales volumes to be up.
Ian Morton MRICS, of Bradburne & Co. in St Andrews added: “The amount of properties coming to the market has been steady and purchasers have become more cautious in their approach. The change in interest rates and increased cost of living are dictating the market as expected.”
Commenting in the survey report, Craig Henderson MRICS of Graham & Sibbald LLP in Ayrshire said: “Sentiment still appears a little guarded, which is to be expected. We are anticipating we will see these trends continue for the next few months as economic factors show no signs of changing in the short term, with a slow and steady market.”
